Johnson Matthey Plc · LSE:JMAT
Johnson Matthey — H1 2011/12 Earnings Presentation
35 slides from Johnson Matthey's earnings presentation, Nov 23, 2011
Slide 1: Presentation of Results for the half year ended 30th September 2011
Presentation of Results for the half year ended 30th September 2011 23rd November 2011
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries and sectors in which Johnson Matthey operates. It is believed that t
Slide 3: Introduction
Introduction Neil Carson Chief Executive
Slide 4: Key Messages
Key Messages Group continues to perform well ROIC exceeds 20% long term target Well placed to deliver strong performance in second half Longer term prospects remain robust 4
Slide 5: Financial Review
Financial Review Robert MacLeod Group Finance Director
Slide 6: Underlying Results
Underlying Results Half year to 30th September 1H 2011 1H 2010 Change as Change £m £m reported const. curr. Revenue 5,900 4,562 +29% +31% Sales excluding precious metals 1,293 1,104 +17% +19% Operating profit 214.7 174.0 +23% +25% Interest (11.7) (9.7) Profit before tax 203.0 164.3 +24% Tax (48.7) (
Slide 7: Cash Flow from Operations
Cash Flow from Operations Half year to 30th September 1H 2011 1H 2010 £m £m Underlying operating profit 214.7 174.0 Depreciation and amortisation 73.6 71.4 Tax paid (42.5) (37.7) Working capital / other (73.7) (160.0) Cash flow from operations 172.1 47.7 • At 30th September 2011, working capital day
Slide 8: Return on Invested Capital (ROIC)
Return on Invested Capital (ROIC) 24% 22% 20% Target 18% 16% 14% 12% 10% 2007/08 2008/09 2009/10 2010/11 1H 2011/12 • Higher operating profit and improved • Exceeded long term target of 20% operational efficiency • Double cost of capital 8
Slide 9: Capital Expenditure
Capital Expenditure £ million Capex / depn (times) 225 2.0 203.5 200 175 1.5 150 134.4 137.9 125 1.0 100 75 50.4 0.5 50 25 0 0.0 2008/09 2009/10 2010/11 1H 2011/12 Environmental Technologies Precious Metal Products Fine Chemicals • Key projects in first half: • 2011/12 capex likely to be around 1.3x
Slide 10: Operating Review
Operating Review Neil Carson Chief Executive
Slide 11: Environmental Technologies Division
Environmental Technologies Division
Slide 12: Environmental Technologies Division
Environmental Technologies Division Half year to 30th September 1H 1H % % at £m 2011 2010 change constant rates Revenue 1,533 1,264 +21 +22 Sales (excluding precious metals) 888 727 +22 +24 Underlying operating profit 90.9 76.6 +19 +20 Return on sales 10.2% 10.5% Sales • Good growth in light duty ca
Slide 13: Estimated Light Duty Vehicle Sales and Production
Estimated Light Duty Vehicle Sales and Production 1H 1H 1H 2H 2011/12 2010/11 change 2011/12 2010/11 change millions millions % millions millions % Sales 7.8 7.4 +5.4 7.8 7.1 +9.9 North America Production 6.3 6.1 +3.3 6.3 6.3 ‐ Sales 9.6 9.1 +5.5 9.6 9.5 +1.1 Europe Production 9.8 9.3 +5.4 9.8 10.6
Slide 14: Emission Control Technologies: Light Duty Catalyst Sales £463m up 11%
Emission Control Technologies Total sales 1H 2011/12 JM’s Light Duty Catalyst Sales £463m up 11% £ million 1,000 900 £879m 800 £754m 700 600 £544m 500 £499m £463m 400 300 £289m 200 £167m £167m £133m £122m 100 £78m £96m 0 2010 2011 1H 2010 2011 1H 2010 2011 1H 2010 2011 1H 2011/12 2011/12 2011/12 201
Slide 15: Light Duty Vehicle Production Outlook 2008-2013
Emission Control Technologies Light Duty Vehicle Production Outlook – 2008‐2013 (calendar years) million 100 Production outlook March 2011 90 86.5 81.4 76.3 80 73.9 67.4 70 59.3 60 50 41.3 44.3 40 37.1 37.3 28.7 29.0 30 21.2 19.5 20.3 19.9 21.0 14.7 16.8 20 12.6 8.6 11.9 12.9 14.0 10 0 2008 2009 201
Slide 16: Estimated HDD Truck Sales and Production
Estimated HDD Truck Sales and Production 1H 1H 1H 2H 2011/12 2010/11 change 2011/12 2010/11 change thousands thousands % thousands thousands % Sales 192.2 134.2 +43.2 192.2 153.2 +25.5 North America Production 214.1 133.2 +60.7 214.1 167.8 +27.6 Sales 143.6 116.2 +23.6 143.6 138.7 +3.5 EU Production
Slide 17: Emission Control Technologies: Heavy Duty Diesel Sales £197m up 54%
Emission Control Technologies Total sales 1H 2011/12 JM’s Heavy Duty Diesel Sales £197m up 54% £ million 250 £194m 200 150 £112m £91m 100 £56m £129m 50 £83m £47m £41m £56m £24m 0 2010 2011 1H 2011/12 2010 2011 1H 2011/12 North America Europe • Sales well ahead, up 56%, broadly in line with • Sales g
Slide 18: Heavy Duty Diesel Vehicle Sales Outlook
Emission Control Technologies Heavy Duty Diesel Vehicle Sales Outlook (calendar years) Western European Truck Sales US Class 4‐8 Truck Sales thousands thousands 400 500 350 400 300 250 300 200 200 150 100 100 50 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2009 2010 2011 2012 2013 2014 2015 2016
Slide 19: Process Technologies
Process Technologies Catalyst Businesses Davy Process Technology • Sales benefited from inclusion of Intercat, up 38% at • Very strong first half, sales up 55% to £52m £120m • 11 new projects won • Methanol catalyst demand down as expected, • China continues to drive DPT’s performance hydrogen catal
Slide 20: Environmental Technologies: Looking Ahead
Environmental Technologies Looking Ahead Emission Control Technologies Process Technologies • Outlook for light duty catalysts remains • Catalyst sales expected to show normal good despite macroeconomic seasonality uncertainties • Plants close to full capacity • Second half will benefit from rare ea
Slide 21: Precious Metal Products Division
Precious Metal Products Division
Slide 22: Precious Metal Products Division
Precious Metal Products Division Half year to 30th September 1H 1H % % at £m 2011 2010 change constant rates Revenue 4,858 3,694 +32 +34 Sales (excluding precious metals) 298 274 +9 +10 Underlying operating profit 107.1 81.2 +32 +32 Return on sales 35.9% 29.7% Sales Services Manufacturing – Catalyst
Slide 23: Precious Metal Products Division: Services Businesses
Precious Metal Products Division Services Businesses Platinum Marketing and Distribution Business Refining Businesses • Average prices increased sharply • Very strong first half • Pt $1,782/oz up 12% • Strong intakes, supported by higher average precious metal prices • Pd $759/oz up 53% • Operationa
Slide 24: Precious Metal Products Division: Manufacturing Businesses
Precious Metal Products Division Manufacturing Businesses • Sales up 8% to £199m Sales • Noble Metals (up 10% to £64m) • Good demand across industrial product range • Medical device components business performed well Catalysts and Chemicals Noble Metals • Colour Technologies (down 3% to £44m) 46% 32
Slide 25: Precious Metal Products Division: Looking Ahead
Precious Metal Products Division Looking Ahead Services Manufacturing • Short term outlook for precious metal • Currently trading well prices uncertain • Impact of investors increasing volatility • Order visibility has reduced • Fundamentals remain robust • Refining intakes holding up 25
Slide 26: Fine Chemicals Division
Fine Chemicals Division UM) Johnson Matthey
Slide 27: Fine Chemicals Division
Fine Chemicals Division Half year to 30th September 1H 1H % % at £m 2011 2010 change constant rates Revenue 146 127 +15 +19 Sales (excluding precious metals) 142 122 +16 +19 Underlying operating profit 32.5 28.8 +13 +16 Return on sales 23.0% 23.6% Sales API Manufacturing • Strong performance, partic
Slide 28: Fine Chemicals: Business Performance and Looking Ahead
Fine Chemicals Business Performance and Looking Ahead API Manufacturing Research Chemicals Business Performance Business Performance • Sales up 17% to £102m • Sales up 14% to £40m • Growth aided by acquired legacy business, new • Good demand across all regions products and short term boost in market
Slide 29: Outlook
Outlook Pt Environmental Technologies: Precious Metal Products: • Economic growth prospects increasingly uncertain but • Activity currently remains robust but visibility ECT has started second half well reduced • Opportunities for Process Technologies Fine Chemicals: Group: • Confident of continued
Slide 30: Key Messages
Key Messages Group continues to perform well ROIC exceeds 20% long term target Well placed to deliver strong performance in second half Longer term prospects remain robust 30
Slide 31: Questions and Answers
Questions and Answers Neil Carson Robert MacLeod Larry Pentz Chief Executive Group Finance Director Executive Director, Environmental Technologies Bill Sandford John Fowler Nick Garner Executive Director, Division Director, Fine Chemicals Group Director, Corporate and Precious Metal Products Strateg
Slide 32: Key Messages
Key Messages Group continues to perform well ROIC exceeds 20% long term target Well placed to deliver strong performance in second half Longer term prospects remain robust 32
Slide 33: JME)
JME) Johnson Matthey
Slide 34: Emission Control Technologies: Light Duty Vehicle Legislation
Emission Control Technologies Light Duty Vehicle Legislation S. Korea India Rest of K‐ULEV Euro 3 (national) World Brazil L4 Brazil L5 Brazil L6 (proposal) Euro 3 Euro 4 China (national 1) (national 1) Japan J‐2000 NLT PNLT Euro 3 Russia Euro 2 Euro 4 Euro 5 European Union Euro 1 Euro 2 Euro 3 Euro
Slide 35: Emission Control Technologies: Heavy Duty Diesel Legislation
Emission Control Technologies Heavy Duty Diesel Legislation Brazil S.Korea Euro III Euro IV (HDD) Rest of (HDD) India India World Euro III (HDD) Euro IV (HDD) Brazil Euro IV (HDD) China Euro III Euro IV (HDD) (HDD) Japan LTS Japan Japan (HDD) (HDD) Russia Stage IIIB Stage IV European (non‐road) (non